Updating Estimates Post 1H26

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Updating Estimates Post 1H26

UK | Business & Employment Services

Serco Group PLC EquityJuneResearch26, 2026

TARGET | ESTIMATE CHANGEUpdating Estimates Post 1H26

We update our estimates post the recent 1H26 trading update. Overall, RATING HOLD

while 1H margins were solid and profit result in line, 1H organic growth PRICE 223.60p^

was slightly weak. There remains some uncertainty on the timing of PRICE TARGET | % TO PT 240.00p (230.00p) | +7%

improvement on US decision-making, which adds to risk on 2H organic 52W HIGH-LOW 326p - 194p

growth recovery. We are mindful of share price pullback and a more FLOAT (%) | ADV MM (USD) 94.5% | 10.38

interesting valuation but still see risk/reward as balanced and maintain our MARKET CAP £2.3B | $3.0B

Hold rating. TICKER SRP LN

^Prior trading day's closing price unless otherwise

noted.

Recap of 1H Trading Update Recap. Serco is expecting to deliver solid 1H results, with

slightly weaker-than-expected organic offset by solid margins. 1H revenue is expected at c.

£2.5bn (+3% YoY) with +1% organic growth, reflecting a mixed regional backdrop. UK & Europe FY (Dec) CHANGE TO JEFe JEF vs CONS

saw strong growth supported by contract mobilisations in Defence and Justice, while North 2025 2026 2025 2026

America saw further impact from the procurement delays flagged at the end of FY25. Adj. REV <-1% -1% NA NA

EBITA is expected to be c£155m, broadly in line with expectations and +6% yoy, with margin EPS +8% +6% +2% -1%

progression above 6% margin. The pipeline remains strong at £12.5b (£12.1b FY25), supported

by the expansion into North America, with >£2bn of contract awards and extensions. 2025 (p) 1Half 2Half FY

EPS -- -- 16.93

North America Recovery? The recovery in North America remains a key driver of the growth PREV 15.64